GC 210275 RO

                                STATE OF NEW YORK
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

      APPEAL OF                              DOCKET NO. GC 210275 RO

                                          :  DISTRICT RENT OFFICE
           Ocean Realty Association,         DOCKET NO. ZEE 210026 RK
                                             TENANT: Patricia Caputo          
                            PETITIONER    : 

                                     IN PART

      On March 26, 1992, the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order issued on March 5, 1992, by the 
      Rent Administrator, 92-31 Union Hall Street, Jamaica, New York, 
      concerning the housing accommodations known as 2909 Ocean Avenue, 
      Brooklyn, New York, Apartment No. 1D, wherein the Rent Administrator 
      determined that an overcharge had occurred.

      The Commissioner has reviewed all of the evidence in the record and has 
      carefully considered that portion of the record relevant to the issue 
      raised by the administrative appeal.  

      This proceeding was originally commenced on March 10, 1986 when the 
      tenant filed an overcharge complaint. 

      In response to the complaint, the owner submitted a copy of the 1985 
      registration and asserted that there was no overcharge.  Subsequently, 
      the owner submitted also copies of the 1984 registration, apartment 
      registration listings for 1986-1988 and a set of leases covering the 
      period from March 15, 1981 through June 14, 1987.

      In an order issued under docket No. ZAC 210212 R on May 15, 1989, the 
      Administrator determined that the owner had registered  the April 1, 
      1984 rent and further determined the owner had collected an overcharge 
      of $429.32 through June 14, 1987 inclusive of interest on the 

      In response to the tenant's request for reconsideration and based upon 

          GC 210275 RO

      an irregularity in a vital matter (finding on reconsideration that the 
      owner had not established that the apartment was properly registered in 
      1984), the Rent Administrator ordered that the matter be reopened to 
      afford the owner the opportunity to prove that the subject apartment was 
      properly registered in 1984 and the opportunity to provide a lease 
      history from April 1, 1980.

      In response to a notice of reopening, the owner submitted the 1984 
      registration with proof of service on the tenant then in occupancy and 
      a complete set of leases covering the period from April 1, 1980 through 
      June 14, 1987.

      In a statement dated May 8, 1991 the tenant submitted a copy of a court 
      stipulation dated April 30, 1991 as well as copies of money orders and 
      lease renewals for the period June 15, 1987 through June 14, 1991.  
      Included was a lease renewal signed by the tenant for the period from 
      June 15, 1987 through June 14, 1987 at a rental of $523.20 per month.  
      This amount was reduced to $506.11 and a refund of $429.32 in the form 
      of a rent credit was made as a result of the Rent Administrator's May 
      15, 1989 order.

      In response to notification of the possible imposition of treble 
      damages, the owner cited numerous errors in the Administrator's 
      calculations, including the failure to consider a lease commencing June 
      15, 1987.

      On March 5, 1992, the Administrator issued an Order of Modification or 
      Revocation determining that Order #ZAC 210121 R should be modified to 
      find an overcharge of $3,577.64, inclusive of treble damages and excess 

      In this appeal, the owner contends that the Administrator's order made 
      the following errors:

           1)   In assuming that the owner had agreed to accept a 
                lower than legally permissible rent in the lease 
                period commencing June 15, 1987, the Administrator 
                erred and incorrectly applied the Collingwood rule.  
                The owner asserts that Collingwood was inappropriate 
                because although it had been forced to accept the 
                lower amount by the tenant's refusal to execute the 
                renewal lease, it had reserved the right to collect 
                a higher lawful amount;

           2)   An incorrect base rent was used to calculate the 
                legal rent for the lease commencing June 15, 1985;

          GC 210275 RO

           3)   Since any overcharge which may have occurred was not 
                willful, treble damages were not justified.

      In response to the petition, the tenant contends in substance that for 
      the period from June 15, 1987 to June 14, 1989 the actual rent paid was 
      $506.11; that the owner should not have been permitted a 7.5% vacancy 
      allowance because the subject apartment was not vacant for a sufficient 
      time before she took occupancy and because the owner was warehousing 
      apartments; that the Administrator erred in revising the original 
      figures presented in the Final Notice dated January 17, 1992; and that 
      treble damages were warranted both in the original order and in the 
      order herein appealed because the overcharge was willful.  The tenant 
      makes other contentions not pertinent to this appeal.

      After careful consideration, the Commissioner believes that this 
      petition should be granted in part.

      Review of the record reveals that the owner herein timely offered the 
      tenant a renewal lease, commencing June 15, 1987, which, the tenant 
      states, she delayed signing while awaiting resolution of her complaint 
      by the DHCR and the owner subsequentLy amended the rent stated in the 
      lease to conform to the rent established in Docket No. ZAC 210121 R at 
      $506.11.  The record further reveals that the owner made a demand for 
      the rent.  Accordingly, the Commissioner finds that the owner did not 
      waive the legal rent and that the Administrator erred in setting the 
      rent for the period commencing June 15, 1987 at $480 instead of $506.11.  
      The owner correctly charged $551.66 for the lease term beginning June 
      15, 1989 and $576.48 for the lease term commencing July 15, 1991.  
      Accordingly, the Commissioner finds that no overcharge occurred after 
      June 15, 1987 and revokes that part of the Order.

      The Commissioner finds that the Administrator did not err in the base 
      rent figure used to compute the vacancy lease commencing June 15, 1985.  
      The owner received a guidelines increase under Rent Guidelines Board 
      Order #16 in the renewal of the prior tenant's last lease.  An owner may 
      not receive more than one guidelines increase during the same guidelines 
      period.  Hence, the Administrator based the increase on the rent in 
      effect on September 30, 1984 $398.56 + 16.5% = $464.32 rather than the 
      lawful rent in effect on March 15, 1985 - $422.47 + 16.5%.  The owner's 
      piggy-backing error resulted in an overcharge of $429.32, inclusive of 
      excess security and interest on the overcharge.  The record indicates 
      that this overcharge has been refunded to the tenant.

      The Rent Stabilization Law provides for a penalty of treble damages for 
      willful overcharges.  The statute creates a rebuttable presumption of 
      willfulness which the owner may overcome by proving non-willfulness by 
      a preponderance of the evidence.  

          GC 210275 RO

      An overcharge caused by a hypertechnical error such as "piggy-backing" 
      guidelines increases within the same year, as occurred in the instant 
      case, is deemed to be non-willful pursuant to Policy Statement 89-2.  
      Accordingly, the Commissioner finds that treble damages are not 

      It is noted that the tenant failed to submit any documentation in 
      support of her allegations with respect to the 7.5% vacancy allowance 
      permitted to the owner.  Moreover, the tenant failed to file a petition 
      of her own raising this issue and it cannot properly be considered in 
      response to the owner's petition. 

      If the owner has already complied with the Rent Administrator's order 
      and these are arrears due to the owner as a result of the instant 
      determination, the tenant shall be permitted to pay off the arrears in 
      twenty four equal monthly installments.  Should the tenant vacate after 
      the issuance of this order or have already vacated, said arrears shall 
      be payable immediately.

      THEREFORE, in accordance with the Rent Stabilization Law and Code, it is

      ORDERED, that this petition be, and the same hereby is, granted in part, 
      and that the Rent Administrator's order be, and the same hereby is, 
      modified in accordance with this order and opinion.


                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner

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